A Brink’s armored truck parks outside the Lombardy Street Kroger. Photo by Burl Rolett.
A local firm that makes its money in a dangerous business has seen one of its hottest markets come back to bite its bottom line in recent weeks.
The Brink’s Co., the publicly traded armored transport company that makes its home in the West End, has been hit hard by a pair of recent robberies in Chile, including one that put a $10 million dent in its third-quarter earnings.
That first and more brazen of the two incidents was a heist on Aug. 12 at the airport in Santiago, Chile.
As described recently by Brink’s spokesperson Ed Cunningham, a gang of seven or eight breached the security at the airport and arrived in a white cargo van to an area where a Brink’s crew was loading a shipment of $10 million cash onto a waiting plane.
“Two of them grabbed the cash, and in less than five minutes they were gone,” Cunningham said.
News reports at the time called it the largest robbery in Chilean history. Its size caused Brink’s to highlight the effect of the incident on its latest financials that were released Oct. 30.
Cunningham said the robbers had secured the exit gates around the airport ahead of time for their escape and torched one of the getaway vehicles shortly after fleeing. And they also torched a car on the other side of the airport grounds before the heist to distract what little security was on hand.
“It was obviously a professional operation,” Cunningham said. “At the moment this happened, there was no armed security, as crazy as that sounds.”
The robbers seemed to have had knowledge of the schedules of airport security workers and made their hit at a time when there were limited armored personnel on site.
At the time of the incident, the Chilean government didn’t allow Brink’s or other armored carriers to bring guns on airport grounds. Brink’s drivers and guards are usually armed on the job. The Chilean government has since changed its stance, Cunningham said.
Brink’s Chilean operations were hit again on Oct. 27, when robbers hijacked an armored vehicle carrying $4 million outside a bank. News outlets from the region reported that the perpetrators later took the vehicle to a metalworking plant and cut it open to get to the money.
Cunningham said Brink’s is still investigating this latest robbery. He confirmed that the total loss was about $4 million and said the company wouldn’t comment further on the incident.
South and Central America have been a hot spot for growth for Brink’s and its peers as trends in the use of cash have changed in the U.S. and Europe.
“One of the reasons Latin America is so good for us is because it is dangerous, but it’s also cash-driven,” Cunningham said.
The company’s Latin American operations accounted for about 37 percent of its $3.6 billion in total revenue in 2013. For the third quarter, during which the bottom line was hit by the $10 million robbery, Brink’s operations in the region produced $343 million of its $913 million in total revenue, topping its other geographic markets by about $40 million.
Brink’s, along with its Spain-based competitor Prosegur, are the market leaders in that part of the world. Prosegur was also hit in by a robbery in Chile the day before the August Brink’s airport incident.
In addition to Chile, Brink’s operates in Venezuela, Brazil, Mexico, Argentina, Colombia and Panama. Its customers there are primarily financial institutions and retailers that are moving large amounts of cash.
In an attempt to combat the danger, Brink’s has separate types of employee training and operations for each of the regions it operates in, Cunningham said. It also employs different sorts of vehicles depending on the danger level of its markets.
“Each country is unique,” Cunningham said.
Brink’s also has ways to hedge its bets in the more dangerous areas by using third-party insurance coverage and self-insuring up to certain dollar amounts.
The Chilean episodes are not the first time Brink’s has been a victim of a big heist. It was one of several armored transport firms hit by a Hollywood-style diamond robbery in Belgium in early 2013 that resulted in a $19 million loss for Brink’s in its first quarter of 2013.
Brink’s budgets for theft losses, much like a retailer budgets for a certain amount of loss from shoplifting. It’s a cost a doing business, Cunningham said.
It uses long-term averages of its historical losses to help set that level, but it’s not an exact science and years without an incident are hard to come by.
“We’re holding money in 43 different countries,” he said. “Any security company that’s moving that much cash around is likely to have some losses.”
The company doesn’t disclose its theft loss budget, he said, adding that the recent Chilean incidents are outliers compared to the size of typical thefts Brink’s deals with.
“You do the best you can at predicting it,” Cunningham said. “You just hope you don’t have too many years with these sorts of big outliers.”
A Brink’s armored truck parks outside the Lombardy Street Kroger. Photo by Burl Rolett.
A local firm that makes its money in a dangerous business has seen one of its hottest markets come back to bite its bottom line in recent weeks.
The Brink’s Co., the publicly traded armored transport company that makes its home in the West End, has been hit hard by a pair of recent robberies in Chile, including one that put a $10 million dent in its third-quarter earnings.
That first and more brazen of the two incidents was a heist on Aug. 12 at the airport in Santiago, Chile.
As described recently by Brink’s spokesperson Ed Cunningham, a gang of seven or eight breached the security at the airport and arrived in a white cargo van to an area where a Brink’s crew was loading a shipment of $10 million cash onto a waiting plane.
“Two of them grabbed the cash, and in less than five minutes they were gone,” Cunningham said.
News reports at the time called it the largest robbery in Chilean history. Its size caused Brink’s to highlight the effect of the incident on its latest financials that were released Oct. 30.
Cunningham said the robbers had secured the exit gates around the airport ahead of time for their escape and torched one of the getaway vehicles shortly after fleeing. And they also torched a car on the other side of the airport grounds before the heist to distract what little security was on hand.
“It was obviously a professional operation,” Cunningham said. “At the moment this happened, there was no armed security, as crazy as that sounds.”
The robbers seemed to have had knowledge of the schedules of airport security workers and made their hit at a time when there were limited armored personnel on site.
At the time of the incident, the Chilean government didn’t allow Brink’s or other armored carriers to bring guns on airport grounds. Brink’s drivers and guards are usually armed on the job. The Chilean government has since changed its stance, Cunningham said.
Brink’s Chilean operations were hit again on Oct. 27, when robbers hijacked an armored vehicle carrying $4 million outside a bank. News outlets from the region reported that the perpetrators later took the vehicle to a metalworking plant and cut it open to get to the money.
Cunningham said Brink’s is still investigating this latest robbery. He confirmed that the total loss was about $4 million and said the company wouldn’t comment further on the incident.
South and Central America have been a hot spot for growth for Brink’s and its peers as trends in the use of cash have changed in the U.S. and Europe.
“One of the reasons Latin America is so good for us is because it is dangerous, but it’s also cash-driven,” Cunningham said.
The company’s Latin American operations accounted for about 37 percent of its $3.6 billion in total revenue in 2013. For the third quarter, during which the bottom line was hit by the $10 million robbery, Brink’s operations in the region produced $343 million of its $913 million in total revenue, topping its other geographic markets by about $40 million.
Brink’s, along with its Spain-based competitor Prosegur, are the market leaders in that part of the world. Prosegur was also hit in by a robbery in Chile the day before the August Brink’s airport incident.
In addition to Chile, Brink’s operates in Venezuela, Brazil, Mexico, Argentina, Colombia and Panama. Its customers there are primarily financial institutions and retailers that are moving large amounts of cash.
In an attempt to combat the danger, Brink’s has separate types of employee training and operations for each of the regions it operates in, Cunningham said. It also employs different sorts of vehicles depending on the danger level of its markets.
“Each country is unique,” Cunningham said.
Brink’s also has ways to hedge its bets in the more dangerous areas by using third-party insurance coverage and self-insuring up to certain dollar amounts.
The Chilean episodes are not the first time Brink’s has been a victim of a big heist. It was one of several armored transport firms hit by a Hollywood-style diamond robbery in Belgium in early 2013 that resulted in a $19 million loss for Brink’s in its first quarter of 2013.
Brink’s budgets for theft losses, much like a retailer budgets for a certain amount of loss from shoplifting. It’s a cost a doing business, Cunningham said.
It uses long-term averages of its historical losses to help set that level, but it’s not an exact science and years without an incident are hard to come by.
“We’re holding money in 43 different countries,” he said. “Any security company that’s moving that much cash around is likely to have some losses.”
The company doesn’t disclose its theft loss budget, he said, adding that the recent Chilean incidents are outliers compared to the size of typical thefts Brink’s deals with.
“You do the best you can at predicting it,” Cunningham said. “You just hope you don’t have too many years with these sorts of big outliers.”